Evaluation of A-share Price Spread and Valuation Impact of JoulWatt Technology's Secondary Listing on the Hong Kong Stock Exchange

Based on collected data and information, I have conducted a systematic analysis of the A-share price spread and valuation impact of JoulWatt Technology’s secondary listing on the Hong Kong Stock Exchange for you.

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(JoulWatt Technology, Stock Code: 688141.SS) is an integrated circuit enterprise focusing on analog and power management chip design. The company was previously listed on the STAR Market in 2022, with a current market capitalization of approximately RMB 12.32 billion [0].

According to public information, the company appointed CLSA as sponsor and overall coordinator on June 12, 2025, and additionally appointed five institutions including CMB International, ICBC International, Yellow River Securities, GF Securities, and Guozheng International as overall coordinators [1]. This marks the substantial advancement stage of the company’s A+H share listing layout.

The Hang Seng CSI HK Stock Connect AH Share Premium Index is the core indicator measuring the degree of A-share premium relative to H-shares. Based on historical data analysis [2][3]:

Time Period	AH Premium Index Characteristics
2007 Peak	Approximately 200 points (A-shares at over 100% premium)
2014-2018	Oscillated between 120-140 points
2020-2022	Fluctuated between 130-150 points
2025 to Date	Broke below 130 points, lowest at 121.58 points

The Hang Seng AH Share Premium Index has fallen by over 10% year-to-date in 2025, breaking below the 130 integer threshold. According to a Goldman Sachs report, the valuation premium of A-shares relative to H-shares has narrowed from 34% three months ago to 14% [2][3].

Factor Category	Details	Impact on Price Spread
Capital Flow Restrictions	No cross-market share selling via CSI HK Stock Connect	Maintains the existence of price spread
Market System Differences	A-shares follow T+1 trading with price limits; H-shares follow T+0 trading without price limits	H-shares have better liquidity
Investor Structure	A-shares are retail-dominated; H-shares have a higher proportion of institutional investors	Affects valuation pricing
Exchange Rate Factors	Fluctuations in HKD to RMB exchange rate	Causes short-term disturbances to the price spread
Liquidity Differences	Hong Kong stock market scale is relatively smaller	H-shares may be priced at a discount

According to research from the People’s Bank of China, the formation mechanism of A+H share price spreads is multi-dimensional [4], mainly stemming from:

• Lack of arbitrage mechanisms due to market segmentation
• Differences in investor protection and information costs
• Differences in risk premiums and market liquidity

SMIC is a typical case of A+H share listing in the semiconductor industry, providing important reference value for JoulWatt Technology [5]:

• 2020-2021: AH share premium rate was approximately 20-30%
• Early 2021: Peaked at 42%
• 2025: Rose significantly to 52%

1. Industry Specificity:
   Due to the strategic position of technological self-reliance in the semiconductor industry, A+H shares often enjoy higher premiums
2. Capital Flow:
   Southbound funds have continuously flowed into the Hong Kong semiconductor sector, driving valuation convergence
3. Liquidity Impact:
   After the Hong Kong listing, share liquidity increased, and price discovery efficiency improved

Since 2025, STAR Market semiconductor enterprises have seen a wave of Hong Kong listings [5]:

• SMIC acquired a minority stake in its subsidiary SMIC North (the first case of share issuance for asset purchase by a multi-listed red-chip company on the STAR Market)
• Hua Hong Company released a draft transaction to acquire 97.5% equity interest in Huali Microelectronics
• AMEC acquired 64.69% equity interest in Hangzhou Zhonggui Semiconductor

Impact Dimension	Expected Performance	Analysis Basis
Spread Convergence	A-share premium rate may decrease by 5-15%	Reference to listing experience of peer companies
Liquidity Improvement	H-share average daily turnover will gradually increase	Participation of southbound funds after inclusion in Stock Connect
Valuation Re-rating	Hong Kong share pricing may be lower than A-shares	Current downward trend of the AH Premium Index

Due to the inability to conduct cross-market selling arbitrage under the CSI HK Stock Connect mechanism [4], the following situations may occur in the initial stage:

• H-share pricing on the first day of listing may be slightly lower than the equivalent A-share price
• The price spread will be approximately 10-20%, in line with the current industry average AH share premium level

1. Increased Pricing Power of Southbound Funds
   • The proportion of southbound funds in Hong Kong stock turnover has risen from 18.3% in 2024 to 23.1% in the first half of 2025 [3]
   • The semiconductor sector is a key allocation direction for southbound funds

2. Continuous Narrowing of AH Share Premium
   • The premium rate is expected to gradually converge from the current industry average of 30-40% to below 20%
   • H-shares of new energy leaders such as CATL and BYD have already turned to a premium [2]

3. Re-rating of Liquidity Premium
   • After the Hong Kong listing, shares can be traded 24 hours a day
   • International investor participation will increase

Impact Factor	Expected Changes
Valuation System	Valuations of the two markets will converge, with the difference narrowing to within 10%
Financing Capacity	The Hong Kong listing will broaden financing channels and enhance international influence
Shareholder Structure	Attract international institutional investors and optimize the shareholder structure
Brand Value	Enhance international reputation and strengthen customer trust

Based on the latest data [0], the current valuation indicators of JoulWatt Technology are as follows:

Indicator	Value	Industry Comparison
Market Capitalization	Approximately RMB 12.32 billion	Mid-sized semiconductor design enterprise
P/E (TTM)	-36.86x	Loss-making status
P/B	11.97x	Relatively high, reflecting growth expectations
Past 12-month Price Change	+54.37%	Significantly outperforms the industry

Scenario	AH Share Premium Assumption	H-share Market Capitalization (RMB billion)	Valuation Impact
Optimistic	10% Premium	Approximately 11.2	10% discount compared to A-shares
Neutral	20% Premium	Approximately 10.3	16% discount compared to A-shares
Conservative	30% Premium	Approximately 9.5	23% discount compared to A-shares

The above analysis is based on the current A-share price of RMB 46.08 per share

With reference to cases such as SMIC (A+H) and Hua Hong Company (A+H):

Company	Latest AH Share Premium Rate	H-share / A-share Market Capitalization Ratio
SMIC	Approximately 52%	0.66
Hua Hong Company	Approximately 35%	0.74
Industry Average	Approximately 30%	0.77

1. Price Spread Inevitable:
   Restricted by market segmentation and lack of arbitrage mechanisms, the AH share price spread will exist long-term
2. Convergence Trend Confirmed:
   The AH share premium has continued to narrow since 2025, and JoulWatt Technology will follow this trend after listing
3. Limited Valuation Impact:
   The Hong Kong share pricing is expected to be discounted by 15-25% compared to A-shares, but will not exert significant downward pressure on A-shares
4. Liquidity Improvement Expected:
   Overall share liquidity will improve after the Hong Kong listing

Investor Type	Strategy Recommendation
A-share Holders	May consider moderate pre-listing reduction, and buy back shares after the price spread converges
Hong Kong Share Subscribers	Focus on the discount range between the offering price and A-shares, and evaluate arbitrage space
Arbitrage Investors	Due to restrictions on cross-market arbitrage, attention should be paid to exchange rates and transaction costs

1. Market Sentiment Risk:
   Valuation fluctuations in the semiconductor industry may affect the Hong Kong share offering price
2. Liquidity Risk:
   Initial Hong Kong share trading may be inactive, affecting price discovery efficiency
3. Exchange Rate Risk:
   HKD-denominated assets are exposed to exchange rate fluctuation risks
4. Policy Risk:
   US-China technological competition may affect semiconductor industry valuations

[0] Jinling API - JoulWatt Technology Real-time Quotes and Company Profile Data

[1] HKEX Announcement - JoulWatt Technology Co., Ltd. Overall Coordinators Appointment Announcement (https://www1.hkexnews.hk/app/sehk/2025/107413/documents/sehk25061200303_c.pdf)

[2] Sohu Finance - Strategic Position and Value of Hong Kong Stocks (https://www.sohu.com/a/972478739_122014422)

[3] Sina Finance - 2026 Hong Kong Stock Market Investment Outlook (https://finance.sina.com.cn/stock/hkstock/2025-12/30/doc-inhesahq6716460.shtml)

[4] People’s Bank of China - Analysis of A-share and H-share Premium: A Macro Perspective (https://www.pbc.gov.cn/yanjiuju/fileDir/resource/cms/2020/05/2020052917163262005.pdf)

[5] Securities Times - Three Semiconductor Leaders Simultaneously Promote Restructuring Transactions (https://www.stcn.com/article/detail/3572432.html)